Optimism fuels Google stock rebound
SAN FRANCISCO — Google Inc.’s stock price continued its recent upturn Monday amid renewed investor optimism about the moneymaking prowess of the Internet’s leading search engine.
Shares of the Mountain View, Calif.-based company surged $12.98, or 3.4 percent, to close at $390.38 on the Nasdaq Stock Market. That extended a rally that has lifted the stock price by nearly $50 in less than two weeks.
Despite the rebound, Google’s shares remain well below their record high of $475.11 reached in early January.
The recent recovery reflects yet another swing in sentiment about one of the nation’s most scrutinized stocks.
The rampant investor anxieties unleashed by a letdown in Google’s fourth-quarter earnings have been supplanted by revived confidence in the company’s ability to develop more products and negotiate more deals that will boost its future profit.
Analysts are expecting Google’s profit this year to approach $3 billion, improving upon 2005 earnings of $1.47 billion.
The latest bit of Google enthusiasm appeared to be driven by the expansion of Google’s online payment and video services, as well as an analyst report suggesting the company will soon announce a deal to install its software on Dell Inc.’s personal computers.
Google’s top executives also are expected to reassure and possibly excite investors Thursday when they’re scheduled to discuss the company’s strategy and products with stock market analysts.
“We believe the (analyst meeting) could be a positive catalyst for Google shares as investors gain greater insight and comfort” about the company’s prospects, Lehman Brothers analyst Doug Anmuth wrote in a Monday research note.
The Search Engine Journal, a Web site focused on industry trends, has predicted that Google will use the analyst forum as an opportunity to unveil a new financial channel to compete with a similar service already offered by rival Yahoo Inc.
A Google spokeswoman said the company is continually looking for expansion opportunities, but had nothing to announce Monday.
UBS analyst Benjamin Schachter and Citigroup analyst Mark Mahaney also provided upbeat assessments about Google in separate reports issued Monday.